This report covers the main Bosnian macroeconomic releases from early January till early February as well as the financial and political events that took place in Bosnia during this period. It also includes corporate news for firms including Bulgaria's Bulgartabac and Turkey's Cengiz Insaat.

On January 31 the IMF approved a EUR 154mn enlargement of Bosnia’s standby deal and extended the agreement by nine months until June 2015, the Fund said in a statement. The new arrangement will provide an anchor for economic policies prior to the October 2014 elections and the political transition.

The Fund kept its 2013 and 2014 GDP growth forecasts for Bosnia unchanged at 0.8% and 2.0% respectively. The IMF 2014 outlook overshoots the latest EBRD forecast for 1.8% GDP expansion this year. Both the IMF and the EBRD forecasts are considerably less optimistic than the latest government's projection for 2.3% export-led GDP growth in 2014.

December’s consumer price index fell 1.2% year on year, after dropping 0.9% year on year the previous month, dragged down by falling food, transport, clothing and footwear, and health costs. Industrial production index grew 6.7% in 2013, having contracted 5.2% the year before on the back of higher manufacturing and electricity output that offset a decline in the mining and quarrying sector.

Key Points:

• Bulgarian cigarette maker Bulgartabac has already restarted production at Bosnian peer Fabrika Duvana Banja Luka several months after acquiring the company in mid-2013. The EIB has confirmed that Turkey's Cengiz Insaat was lawfully chosen to build EUR 182mn motorway section in Bosnia.

• The jobless rate edged down to 44.5% at end-November from 44.7% at end-October, the country’s labor and employment agency said.

• The country’s current account deficit narrowed 42% year on year to EUR 574mn in January–September, thanks to a falling foreign trade gap and higher investment income from abroad.

• Average monthly lending growth slowed to 2.8% in 2013 from 4.9% the year before due to the slower increase of retail lending, while corporate lending growth strengthened slightly over the period. On the other hand, the average monthly deposit growth strengthened to 5.1% last year from 2.6% in 2012 as corporate deposits have been increasing in annual terms since March 2013, reversing a declining trend of more than two years.

• The gross foreign reserves of Bosnia’s central bank grew 8.6% year on year to EUR 3.6bn at end-December, slowing from a 10.7% year on year rise the month before.